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§ 5.5 POOLED INCOME FUNDS(g) Gift Tax AspectsGenerally, the federal gift tax charitable deduction rules with respect to charitableremainder trusts are the same as the federal income tax charitable deductionrules. 18 A federal gift tax return may be required, however, although the charitablededuction will preclude the tax.When there is a single noncharitable beneficiary of a charitable remaindertrust, and that beneficiary is not the donor, the donor has made a potentially taxablegift of the current value of the income interest. (When the donor is also thesole income beneficiary, there is no gift, inasmuch as the tax law does not recognizethe concept of an individual donating to himself or herself.) The $11,000annual gift tax exclusion ($22,000, in the case of a two-spouse gift) is available,however, as well as the general unified estate and gift tax credit. When the nondonorbeneficiary is the donor’s spouse, the gift will qualify in full for the unlimitedmarital deduction.When there are two noncharitable beneficiaries of a charitable remaindertrust, and one of the beneficiaries is not a donor, the result is a gift to the otherbeneficiary of the current value of his or her income interest. The value of thegift will depend on whether the donor or the other beneficiary is the principalbeneficiary. Again, the annual gift tax exclusion and the unified credit areavailable, as is the marital deduction (when the other beneficiary is thedonor’s spouse).Care must be exercised with respect to the tax status of the remainder beneficiary.Although any charitable organization is an eligible beneficiary for gift taxpurposes, the scope of the gift tax definition of charity is narrower.(h) Estate Tax AspectsIf an individual creates a charitable remainder trust during his or her lifetimeand is not an income beneficiary, the value of the gift(s) is added to the donor’staxable estate and any gift tax paid is credited against any estate tax. 19When an individual creates a charitable remainder trust during his or herlifetime and has an income interest in it for any period that does not terminatebefore his or her death, the value of the trust principal will be included in theestate. Even if the decedent did not retain an income interest, the value of thetrust principal will be part of the gross estate if he or she retained a testamentarypower to revoke the donee’s interest.Again, the marital deduction is available and the same considerations applywith respect to the charitable donee.§ 5.5 POOLED INCOME FUNDSAnother planned giving technique is the gift to a pooled income fund. 20 Like acharitable remainder trust, a pooled income fund is a form of split-interest trust,18 See § 8.2.19 See § 8.3.20 The pooled income fund is the subject of Chapter 13. 155